On July 1, 2006, Leon Cruz established an interior decorating business, Ingres Designs. During the remainder of the month, Leon Cruz completed the following transactions related to the business:

 

July 1 Leon transferred cash from a personal bank account to an account to be used for the business in exchange for capital stock, $18,000.

5 Paid rent for the period of July 5 to the end of the month, $1,500.

10 Purchased a truck for $15,000, paying $5,000 cash and giving a note payable for the remainder.

13 Purchased equpment on account, $4,500.

14 Purchased supplies for cash, $975.

15 Paid annual premiums on property and casualty insurance, $3,000.

15 Received cash for job completed, $4,100.

21 Paid creditor a portion of the amount owed for equipment purchased on July 13, $2,400.

24 Recorded jobs completed on account and sent invoices to customers, $6,100.

26 Received an invoice for truck expenses, to be paid in August, $580.

27 Paid utilities expense, $950.

27 Paid miscellaneous expense, $315.

29 Received cash from customers on account, $3,420.

30 Paid wages of employees, $2,500.

31 Paid dividends, $2,000.

Instructions

1. Journalize each transaction in a two-column journal, referring to the following chart of accounts in selecting the accounts to be debited and credited.

Cash                                                      Capital Stock
Accounts Receivable                       Dividends                           

Supplies                                               Fees Earned

Prepaid Insurance                            Wages Expense

Equipment                                          Rent Expense

Truck                                                     Utilities Expense

Notes Payable                                   Truck Expense

Accounts Payable                             Miscellaneous Expense

2. Post the journal to a ledger of T accounts. For accounts with more than one posting, determine the account balance.

3. Prepare a trial balance for Ingres Designs as of July 31, 2006.